Saturday, April 9, 2011

World Bank: In-game gold benefits third-world economies

A World Bank report claims that Asian economies are benefiting by about $3 billion a year in the sale of virtual gold. That is, the workers in nations like Vietnam log onto video games like World of Warcraft and "farm" for in-game currency. This in-game money is transferred to Western players in exchange for real dollars and euros.

From the BBC:

Increasingly, the report said, Western players who have limited time for gaming are buying game cash, gear and high level characters from people in China and Vietnam that are paid to play as a job.

Translation: American and European players are spending their time performing productive labor. Workers in poor nations have a comparative advantage in gold farming and can justify spending their fireballing online demon boars all day because the pay is better than most of the other options available to them.

The Western players value their free time more than the money they pay, and the Eastern workers value the money more than the time it takes to earn it. This transaction benefits both parties, and there is only one possible trade barrier: the selling of virtual gold is against the rules of games like World of Warcraft and there is a small risk of having ones account shutdown and banned.

This is not a traditional illegal industry like drugs or arms smuggling, but it is against the rules in the virtual world of the game. There have been a lot of complaints that gold farmers harm the in-game economies, but this report suggests that the trade-off is a huge benefit to the real world economy.

The whole report is pretty interesting and worth a read.

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